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Tuesday, March 31, 2015

Americans are an optimistic lot. That's what the research says, anyway.

When the folks at pewresearch.org polled 48,643 people in 44 countries, asking them how their day was going, they got answers that correlated inversely with GDP.

By way of background, Pew notes: "As part of the Pew Research Center’s annual Global Attitudes survey, this question is usually the first we pose to respondents in all the countries we survey. One reason we ask such a milquetoast question first is to help the respondents become more comfortable with the interviewer. The vast majority of the polls we conduct are done with face-to-face interviews in the respondent’s home, and asking about their day is one way to kick off the conversation."

What Pew found is that if you come from a comparatively poor country like El Salvador, you're more likely to say you're having a good day. The wealthier your country, the less likely it is you'll say you're having a particularly good day. The outlier here is the United States. The U.S. has the highest GDP of any country on the chart, and yet people answer the "how's your day?" question as if they live in Tanzania. Maybe a lot of us, in our heads, feel like we're living in Tanzania.

Or maybe Americans just have a different attitude. When asked, on a scale of 0 to 10, how important working hard is to getting ahead in life, 73% of Americans said it is was a “10” or “very important,” compared with a global median of 50% among the 44 nations.

Americans really do believe in the American dream, even though reality says the dream is largely a myth. Evidence on the latter comes from something now well known to economists as The Great Gatsby Curve.

The Gatsby chart is often attributed to Alan Krueger, who used it in a memorable speech in 2012, but it actually comes from University of Ottawa's Miles Corak. It plots an intergenerational earnings correlation (on the y-axis) against something known as the Gini index (on the x-axis). The intergenerational earnings index correlates how much you earn with how much your parents earn. It's meant to be a proxy for class mobility: The idea is that if you live in a land of equal opportunity, there should be little correlation between what the kids of a rich person earn and what the kids of poor parents earn, whereas in a land of less opportunity, you will earn in accordance with what social class you were born into. The Gini index measures wealth inequality, or deviation from equal wealth distribution.

The graph shows that for the ten countries in question, intergenerational earnings correlate strongly (r-squared = 0.76) with wealth inequality, and the worst country of the bunch, for both class mobility and wealth inequality, is the United States. If you wanted to write a dissertation on how the American dream isn't working, this is one of the graphs you'd use in your thesis.

The graph has been criticized by right-wing flag-wavers based on the quality and relevancy of the data (standard ploys from the flag-waver ploybook: criticize the data in hopes of undermining the conclusion), but in fact, you can find various versions of this chart all over the Internet, some with more points on it, and the more points you put on the graph the stronger the relationship looks. In all likelihood, if you could find better data for the points, the relationship would get stronger, not weaker, so the idea that this graph doesn't really show a strong relationship is silly.

It turns out there are countries with greater wealth inequality (and worse mobility) than the U.S. They're places like Peru and Chile, countries where (coincidentally) people on the street are optimistic.

Paradoxically, I think Pew is right and I think Krueger is right. Wealth disparity is real (if you're a denialist on this, you're just plain wrong; the data are overwhelming), "equal opportunity" is a fading myth, and Americans don't care: they believe what they want to believe, which is that you can better yourself. It's a healthy belief system, the kind of belief system you need if you're in desperate straits; the kind you're lucky to have, if you have it.

☙ ❧

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